**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-Q/A**





ý
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                the quarterly period ended**June
                30, 2008**ORo
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                the transition period from ________________ to
                ________________





Commission
      file number: 000- **** 1434389





**UNIVERSAL
      SOLAR TECHNOLOGY, INC** **.**


(Exact
      name of registrant as specified in its charter)





Nevada
            
            26-0768064(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)No.
                1 Pingbei Road 2,
              Nanping
                Science & Technology Industrial Park,
              Zhuhai
                City, Guangdong Province,
              The
                People’s Republic of China
            
            519060(Address
                of principal executive offices)
            
            (Zip
                Code)





86-756-8682610


(Registrant’s
      telephone number, including area code)





(Former
      name, former address and former fiscal year, if changed since last
      report)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.


Yes x    No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.


Large
                accelerated filero
            Accelerated
                filero
            Non-accelerated
                filero


Smaller
      Reporting Company x


Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes o    No x





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date.





Class
            
            Outstanding
                at September 30, 2008Common
                Stock, $0.0001 par value per share
            
            [20,942,408shares]








**Explanatory
        Note**
 
 This
        Amendment No. 1 to Form 10-Q (this “Amendment No. 1”) amends the
        Quarterly Report on Form 10-Q for the period ended June 30, 2008,
        originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on
        October 30, 2008 (the “Original Report”) of Universal Solar Technology, Inc.
        (the “Company”, “our”, we”, or “we”). We are filing this Amendment No. 1 to supply
        the date and conformed signature pages. Other than the revisions referred
        to
        above and related certifications, all other information included in the Original
        Report remains unchanged. This Amendment No. 1 is not intended to, nor does
        it, reflect events that have occurred since the filing of the Original Report,
        and does not modify or update the disclosures therein in any way other than
        as
        required to reflect the changes described above.


**TABLE
      OF CONTENTS**




**PART
                I - FINANCIAL INFORMATION**
            3Item
                1. Financial Statements
            3Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations
            9Item
                3. Quantitative and Qualitative Disclosures About Market
                Risk
            12Item
                4T. Controls and Procedures
            12**PART
                II - OTHER INFORMATION**
            13Item
                1. Legal Proceedings
            13Item
                1A. Risk Factors
            13Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            29Item
                3. Defaults Upon Senior Securities
            29Item
                4. Submission of Matters to a Vote of Security Holders
            29Item
                5. Other Information
            29Item
                6. Exhibits
            29**SIGNATURES**
            30




*Except
      as otherwise required by the context, all references in this report to "we",
      "us”, "our", “Universal Solar Technology” or "Company" refer to the consolidated
      operations of Universal Solar Technology, Inc., and its wholly owned
      subsidiaries.*





2





**Item
      1. Financial Statements.**





**UNIVERSAL
      SOLAR TECHNOLOGY, INC. AND SUBSIDIARY**


(A
      Development Stage Company)





CONSOLIDATED
      BALANCE SHEET







June 30, 2008
            
            December 31, 2007Unaudited
            
            Audited**ASSETS****CURRENT
                ASSETS:**Cash
            
            $
            234,688
            
            $
            91,183Other
                sundry current assets
            
            
            6,595
            
            
            1,779**TOTAL
                CURRENT ASSETS AND TOTAL ASSETS**
            
            **$**
            **241,283**
            
            **$**
            **92,962****LIABILITIES’
                AND STOCKHOLDERS’ DEFICIENCY****CURRENT
                LIABILITIES:**Accrued
                expenses
            
            $
            -
            
            $
            17,500Stockholder
                loan
            
            
            445,061
            
            
            106,730**TOTAL
                CURRENT LIABILITIES**
            
            
            **445,061**
            
            
            **124,230****STOCKHOLDERS’
                DEFICIENCY:**Preferred
                stock, $0.0001 par value,
              10,000,000
                shares authorized,
              0
                shares issued and outstandingCommon
                stock, $0.0001 par value,
              90,000,000
                shares authorized,
              June
                2008-20,942,408 shares issued and
                outstanding
              December
                2007-20,000,000 shares issued and
                outstanding.
            
            
            2,094
            
            
            2,000Additional
                paid-in capital
            
            
            144,086
            
            
            128,757Deficit
                accumulated during development stage
            
            
            (366,988
            )
            
            (156,911
            )Accumulated
                other comprehensive income
            
            
            17,030
            
            
            (5,114
            )**TOTAL
                STOCKHOLDERS’ DEFICIENCY**
            
            
            **(203,778**
            **)**
            
            **(31,268**
            **)****TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**
            
            **$**
            **241,283**
            
            **$**
            **92,962**












See
      notes
      to financial statements





3





**UNIVERSAL
      SOLAR TECHNOLOGY, INC. AND SUBSIDIARY**


(A
      Development Stage Company)





CONSOLIDATED
      STATEMENT OF OPERATIONS





Three Months
              Ended
              June 30, 2008
            
            Six Months
              Ended
              June 30, 2008
            
            From Inception
              (July 24, 2007)
              To
              June 30, 2008**SALES**
            
            **$**
            **-**
            
            **$**
            **-**
            
            **$**
            **-****COSTS
                AND EXPENSES:**General
                and administrative expenses
            
            
            173,506
            
            
            204,077
            
            
            360,988LOSS
              BEFORE INTEREST EXPENSE
            
            
            **(173,506**
            **)**
            
            (**204,077**
            **)**
            
            **(360,988**
            **)**INTEREST
              EXPENSE
            
            
            6,000
            
            
            6,000
            
            
            6,000**NET
              LOSS**
            
            **$**
            **(179,506**
            **)**
            
            **(210,077**
            **)**
            ****
            **(366,998**
            **)**BASIC
                AND DILUTED LOSS PER
              COMMON
                SHARE
            
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.02
            )WEIGHTED
                AVERAGE NUMBER OF SHARES
              OUTSTANDING
                DURING THE PERIOD
            
            
            20,942,408
            
            
            20,646,364
            
            
            20,335,201







See
      notes
      to financial statements





4





**UNIVERSAL
      SOLAR TECHNOLOGY, INC. AND SUBSIDIARY**


(A
      Development Stage Company)





CONSOLIDATED
      STATEMENT OF CASH FLOWS





Six Months
              Ended
              June 30, 2008
            
            From Inception
              (July 24, 2007) to
              June 30, 2008**OPERATING
                ACTIVITIES:**Net
                loss
            
            $
            (210,077
            )
            $
            (366,988
            )*Adjustments
                to reconcile net loss to net cash used in operating
                activities:*Imputed
                interest on stockholder loan
            
            
            6,000
            
            
            6,000Stock
                issued for services
            
            
            9,423
            
            
            9,423*Changes
                in operating assets and liabilities:*Other
                current assets
            
            
            (4,817
            )
            
            (6,595
            )Accrued
                expenses
            
            
            (17,500
            )
            
            -**NET
                CASH USED IN OPERATING ACTIVITIES**
            
            
            **(216,971**
            **)**
            
            **(358,160**
            **)****FINANCING
                ACTIVITIES:**Loan
                from stockholders
            
            
            338,331
            
            
            445,061Sale
                of common stock
            
            
            -
            
            
            130,757**NET
                CASH PROVIDED BY FINANCING ACTIVITIES**
            
            
            **338,331**
            
            
            **575,818****EFFECT
                OF EXCHANGE RATE ON CASH**
            
            
            **22,144**
            
            
            **17,030****INCREASE
                IN CASH**
            
            
            **143,504**
            
            
            **234,688****CASH –
                BEGINNING OF PERIOD**
            
            
            **91,184**
            
            
            **-****CASH –
                END OF PERIOD**
            
            **$**
            **234,688**
            
            **$**
            **234,688**







See
      notes
      to financial statements





5





**UNIVERSAL
      SOLAR TECHNOLOGY, INC. AND SUBSIDIARY**


(A
      Development Stage Company)





NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS





JUNE
      30,
      2008







**1**
            **BUSINESS
                DESCRIPTION**





Universal
      Solar Technology, Inc. (the “Company”) was incorporated in the State of Nevada
      on July 24, 2007. The Company operates through its wholly-owned subsidiary,
      Kuong U Science & Technology (Group) Ltd. (“Kuong U”), a company
      incorporated in Macau, Peoples Republic of China (“PRC”) on May 10, 2007, and
      plans to manufacture in the PRC through Nan Yang Kuong U Solar Energy Ltd.,
      a
      wholly foreign owned enterprise incorporated in the PRC. The Company intends
      to
      provide silicon wafers, solar cell, high efficiency solar photovoltaic (“PV”)
      modules and other PV application products such as solar lighting systems in
      the
      European Union, North America, Africa and Asia.





Our
      independent auditors have added an explanatory paragraph to their audit report
      issued in connection with the financial statements for the period ended December
      31, 2007, relative to our ability to continue as a going concern.  We had
      negative working capital of $31,268 as of December 31, 2007, we had a deficit
      accumulated during development stage of $156,911 incurred through  December
      31, 2007. As of June 30, 2008 we have negative working capital of $203,778
      and a deficit accumulated during development stage of $366,988.  This means
      that there is substantial doubt that we can continue as an ongoing business
      for
      the next 12 months. The financial statements do not include any adjustments
      that
      might result from the uncertainty about our ability to continue our business.





***2***
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING
                POLICIES**





***Basis
      of Presentation - Development Stage Company***





The
      accompanying unaudited financial statements have been prepared in accordance
      with accounting principles generally accepted for interim financial information
      and with the instructions to Form 10-Q and Article 8 of Regulation S-X relating
      to smaller reporting companies.  Accordingly, they do not include all
      of the information and footnotes required by generally accepted accounting
      principles (“GAAP”) for complete financial statements.  In the opinion
      of management, all adjustments (consisting of normal recurring accruals)
      considered necessary for a fair presentation have been
      included.  Operating results for the three and six-month periods ended
      June 30, 2008 are not necessarily indicative of the results that may be expected
      for the year ended December 31, 2008.





The
      balance sheet at December 31, 2007 has been derived from the audited financial
      statements at that date but does not include all of the information and
      footnotes required by GAAP for complete financial statements.





***Uses
      of estimates in the preparation of financial
      statements***





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of net revenue and expenses during each reporting period.
      Actual results could differ from those estimates.





6







***Cash***





The
      Company maintains cash and cash equivalents with financial institutions in
      the
      PRC which are not insured or otherwise protected.




***Research
      and development costs***




Research
      and development costs are charged to expenses as incurred.




***Currency
      translation***




Since
      the
      Company operates solely in the PRC, the Company = s
      functional currency is the Chinese Yuan ( A RMB @ ).
      Assets
      and liabilities are translated into U.S. Dollars at the year end exchange rates
      and records the related translation adjustments as a component of other
      comprehensive income (loss). Revenue and expenses are translated using average
      exchange rates prevailing during the period. Foreign currency transaction gains
      and losses are included in current operations.





**3**
            **STOCKHOLDER
                LOAN**





The
      amounts due to stockholders are non-interest bearing and due on demand. The
      Company has imputed interest of approximately $6,000 for the period ended June
      30, 2008, which has been recorded as a contribution to capital.





**4**
            **RELATED
                PARTY TRANSACTIONS**





The
      Company’s principal executive office is that of the Company’s chairman. The
      Company does not pay any rent to the chairman and there is no agreement to
      pay
      any rent in the future.





The
      Company has developed prototype products through the solar department through
      a
      related company with no charge.





**5**
            **RISK
                FACTORS**





***Vulnerability
      due to Operations in PRC***





The
      Company = s
      operations may be adversely affected by significant political, economic and
      social uncertainties in the PRC. Although the PRC government has been pursuing
      economic reform policies for more than 20 years, there is no guarantee that
      the
      PRC government’s pursuit of economic reforms will be consistent or
      effective.





The
      PRC
      has adopted currency and capital transfer regulations. These regulations require
      that the Company complies with complex regulations for the movement of capital.
      Because most of the Company’s future revenues will be in RMB, any inability to
      obtain the requisite approvals, or any future restrictions on currency
      exchanges, will limit the Company’s ability to fund its business activities
      outside China or to pay dividends to its shareholders.





The
      Company’s assets will be predominantly located inside China. Under the laws
      governing foreign invested enterprises in China, dividend distribution and
      liquidation are allowed, but subject to special procedures under the relevant
      laws and rules. Any dividend payment will be subject to the decision of the
      board of directors and subject to foreign exchange rules governing such
      repatriation. Any liquidation is subject to both the relevant government
      agency’s approval and supervision, as well as the foreign exchange control.





7







***Vulnerability
      due to Operations in PRC - Continued***





In
      addition, the results of business and prospects are subject, to a significant
      extent, to the economic, political and legal developments in China.





While
      China’s economy has experienced a significant growth in the past twenty years,
      growth has been irregular, both geographically and among various sectors of
      the
      economy. The Chinese government has implemented various measures to encourage
      economic growth and guide the allocation of resources. Some of these measures
      benefit the overall economy of China, but may also have a negative effect on
      the
      Company. The Company’s sales and financial condition may be adversely affected
      by the government control over capital investments or changes in tax
      regulations.





Foreign
      companies conducting operations in the PRC face significant political, economic
      and legal risks. The Communist regime in the PRC includes a stifling bureaucracy
      which may hinder Western investment. Any new government regulations or utility
      policies pertaining to the Company’s PV products may result in significant
      additional expenses to the Company, Company’s distributors and end users and, as
      a result, could cause a significant reduction in demand for the Company’s PV
      products.




**6**
            **SUBSEQUENT
                EVENT**





The
      Company received a Certificate of Approval from the Henan Provincial Government
      in the PRC for its wholly foreign owned enterprise (“WFOE”), Nanyang Kuong U
      Solar Energy Ltd. on September 3, 2008 and its WFOE business license on
      September 8, 2008. In addition, the Company received a foreign exchange
      certificate for the WFOE on September 3, 2008 from the local branch of the
      State
      Administration of Foreign Exchange (“SAFE”), and plans to begin manufacturing
      operations on or about July 1, 2009.





8





**Item
      2.  Management’s Discussion and Analysis of** **Financial
      Condition and Results** **of
      Operations.**




*The
      following discussion should be read in conjunction with the Financial Statements
      and Notes thereto appearing elsewhere in this Form 10-Q.*




**Safe
      Harbor Regarding Forward-Looking Statements**




*The
      following discussion contains forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933 and Section 21E of the Securities
      Exchange Act of 1934 relating to future events or our future performance. Actual
      results may materially differ from those projected in the forward-looking
      statements as a result of certain risks and uncertainties set forth in this
      report. Although management believes that the assumptions made and expectations
      reflected in the forward-looking statements are reasonable, there is no
      assurance that the underlying assumptions will, in fact, prove to be correct
      or
      that actual results will not be different from expectations expressed in this
      report.*





**Overview**





History





Universal
      Solar Technology, Inc. was incorporated in the State of Nevada on July 24,
      2007.
      It operates through its wholly owned subsidiary, Kuong U Science &
Technology (Group) Ltd. (“Kuong U”), a company incorporated in Macau, Special
      Administrative Region of the People's Republic of China (Macau SARC) on May
      10,
      2007.





We
      are a
      development stage company and have not generated or realized any revenues from
      our business operations.





We
      have
      completed the development of our prototype product, and selected Yuemao Laser
      as
      the third party manufacturer should we receive orders. We believe the technical
      aspects of our prototype products are sufficiently developed and are ready
      to
      market in the EU and elsewhere.





From
      now
      to 90 days from the completion of our offering, we expect to receive test
      results for our Photovoltaic Modules, GYSP175. We expect to know the results
      whether or not our product have passed the VDE standard certificates of IEC
      61730-1, and 61730-2, and IEC 61215. If we receive the certificates of IEC
      61730-1, and 61730-2, and IEC 61215, we would be able to market our Photovoltaic
      Modules, GYSP175 in Europe. If we fail to receive the certificates, we will
      continue to improve our prototype products design and re-apply for EU standard
      certification.





From
      now
      to 90 days from the completion of our offering, we plan to set up a Wholly
      Foreign Owned Enterprises (WFOE) in Nanyang City, Henan Province, China. We
      plan
      to manufacturing solar wafers, solar cell and Photovoltaic Modules. We received
      Certificate of Approval from Henan Provincial government for our WFOE on
      September 3, 2008 and our WFOE business license on September 8, 2008. In
      addition, we received foreign exchange certificate for our WFOE on September
      3,
      2008 from local branch of State Administration of Foreign Exchange (SAFE).


We
      must
      raise cash from sources other than operations. Our only other source for cash
      at
      this time is investments by others in our company. We must raise cash to
      implement our project and begin our operations in China. Even if we raise the
      maximum amount of money in our public offering, we do not know how long the
      money will last, however, we do believe it will last twelve months. We will
      not
      begin China operations until we raise money from our public
      offering.





To
      meet
      our need for cash we are attempting to raise money from our public offering.
      We
      believe that we will be able to raise enough money through our public offering
      to begin China operations but we cannot guarantee that once we begin China
      operations we will stay in business after China operations have commenced.
      If we
      are unable to successfully sell our PV modules products internationally, we
      may
      quickly use up the proceeds from the minimum amount of money from our public
      offering and will need to find alternative sources, like a second public
      offering, a private placement of securities, or loans from our officers or
      others in order for us to maintain our operations. At the present time, we
      have
      not made any arrangements to raise additional cash, other than through our
      public offering. If we need additional cash and cannot raise it we will either
      have to suspend operations until we do raise the cash, or cease operations
      entirely. If we raise the minimum amount of money from our public offering,
      we
      project the funds will last a year but give us with limited funds available
      to
      develop our growth strategy. If we raise the maximum amount, we believe the
      money will last a year and also provide funds for growth strategy. If we raise
      less than the maximum amount and we need more money we will have to revert
      to
      obtaining additional money as described in this paragraph. Other than as
      described in this paragraph, we have no other financing plans.





9





Plan
      of
      Operation





Assuming
      we raise the minimum amount in our public offering, we believe we can satisfy
      our cash requirements during the next 12 months. We will not produce any product
      before we receive down payment from our buyer. We do not expect to purchase
      or
      sell plant or significant equipment. Further we do not expect significant
      changes in the number of employees. Upon completion of our public offering,
      our
      specific goal is to profitably sell our products, to set up our WFOE subsidiary
      in Nanyang City, Henan province in China, to locate a site to for us enter
      land
      use right leasing agreement, and to begin factory constructions after we finish
      the offering.





We
      intend
      to accomplish the foregoing through the following milestones:





1.
      Complete our public offering. We believe that we will raise sufficient capital
      to begin our operations in Nanyang City, Henan Province, China. We believe
      this
      could take up to 270 days from the date the Securities and Exchange Commission
      declares our offering effective. We will not begin factory construction in
      Nanyang City, Henan Province, China until we have closed our public offering.
      We
      intend to concentrate all of our efforts on raising as much capital as we can
      during this period.





2.
      If we
      receive the certificates of IEC 61730-1, and 61730-2, and IEC 61215, we would
      be
      able to market our Photovoltaic Modules, GYSP175 to Europe. Before we received
      such certificates, we plan to market our PV modules and solar lighting systems
      to Asia and Africa countries. We expect to receive orders from Asia or Africa
      in
      the second quarter of 2008.





3.
      After
      completing the offering, we will immediately begin to establish our office
      and
      in Nanyang City, Henan Province, China and to lease the land for our new
      manufacturing facilities. We need to begin Nanyang City, China operations.
      Establishing our offices will take 7-10 days. We believe that it will cost
      $5,000 to establish our office. We do not intend to hire more employees
      immediately. Our sole officer and director will handle our administrative
      duties.





4.
      After
      our office is established, we intend to enter land leasing agreement with local
      government in Nanyang City, Henan Province, China. We plan to lease 100 acre
      land for 50 years lease at costs of $3,714 per acre. Our total estimated costs
      is $371,428. We are having business discussion with relevant local government
      authorities regarding to this matter. We plan to build a 5,000 square meters
      factory space. Our estimated costs for building a new factory is estimated
      at
      $85.7 per square meter. Our total estimated costs of the factory is $428,500.
      We
      already visited the actual site that the land will be leased and also did
      evaluation on the factory setup costs accordingly. We will not begin factory
      construction before we find strategic investors.





5.
      We
      already registered a Wholly Foreign Owned Enterprise (WFOE) in Nanyang City,
      Henan Province in China. We have received approval from all government
      authorities as of September 30, 2008.





Limited
      Operating History; Need For Additional Capital





There
      is
      no historical financial information about us upon which to base an evaluation
      of
      our performance. We are a development stage company and have not generated
      any
      revenues. We cannot guarantee that we will be successful in our business
      operations. Our business is subject to risks inherent in the establishment
      of a
      new business enterprise, including limited capital resources and possible cost
      overruns due to price and cost increases in services and products.





To
      become
      profitable, we have to sell our products and generate revenue. In addition,
      because our new WFOE manufacturing setup in China will require additional
      investment, we are seeking equity financing to provide the capital required
      to
      implement our operations in China.





We
      have
      no assurance that future financing will be available to us on acceptable terms.
      If financing is not available on satisfactory terms, we may be unable to
      continue, develop or expand our operations into China. Equity financing could
      result in additional dilution to existing shareholders.





10





RESULTS
      OF OPERATIONS





***For
      the six months ended June 30, 2008***




Our
      loss
      for the six months period ending June 30, 2008 was $210,077. We spent
      $120,670 on professional fees, $25,557 on salary, $49,874 on business
      information memorandum, $6,415 on rent and approxmimately $1,561 of
      miscellanious expenses. In addition, $6,000 of interest expense was imputed
      on
      the stockholder loan. We have not started our proposed business operations.





Liquidity
      and capital resources





As
      of
      June 30, 2008, we have not yet generated any revenues from our business
      operations.





As
      of
      June 30, 2008, our total assets were $241,283 and our total liabilities were
      $445,061. As of June 30, 2008, we had cash of $234,688.





Our
      operating plan for 2008 is focused on setting up a WFOE operation in Nanyang
      City, Henan Province, China, and getting approval for EU standard certification
      in order for us to generate sales in the EU market. We estimate that
      approximately $150,000 will be required to support this plan for the next 12
      months. We are actively seeking additional funding, but to date have not entered
      into any agreements or other arrangements for such financing. There can be
      no
      assurance that the required additional financing will be available on terms
      favorable to us or at all.





Without
      additional funding, the company will not be able to pursue its business model.
      If adequate funds are not available or are not available on acceptable terms
      when required, we would be required to significantly curtail our operations
      and
      would not be able to fund the development of the business envisioned by our
      business model. These circumstances could have a material adverse effect on
      our
      business and our ability to continue to operate as a going concern.




**OFF-BALANCE
      SHEET ARRANGEMENTS**




We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that are material to our
      investors.




**CRITICAL
      ACCOUNTING POLICIES**




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires our management to make
      assumptions, estimates and judgments that affect the amounts reported in the
      financial statements, including the notes thereto, and related disclosures
      of
      commitments and contingencies, if any. We consider our critical accounting
      policies to be those that require the more significant judgments and estimates
      in the preparation of financial statements, including the
      following:





*Use
      of estimates.* In
      preparing financial statements in conformity with accounting principles
      generally accepted in the United States of America, management makes estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosures of contingent assets and liabilities at the dates of the financial
      statements, as well as the reported amounts of revenues and expenses during
      the
      reporting periods. These accounts and estimates include, but are not limited
      to,
      the valuation of accounts receivable, inventories, deferred income taxes,
      provision for warranty and the estimation on useful lives of property, plant
      and
      equipment. Management makes these estimates using the best information available
      at the time the estimates are made; however, actual results could differ
      materially from those estimates.





*Concentrations
      of credit risk.* Financial
      instruments that potentially subject the Company to significant concentrations
      of credit risk consist principally of cash and cash equivalents and trade
      receivables. As of June 30, 2008, substantially all of the Company’s cash and
      cash equivalents were held by major financial institutions located in the Macau
      Special Administrative Region of the People's Republic of China (Macau SARC),
      which management believes are of high credit quality.




*Revenue
      recognition.* Revenue
      is recognized when it is probable that the economic benefits will flow to the
      Company and when the revenue can be measured reliably, on the following
      basis:





11




(i)
            revenue
                from sales of the Company’s products is recognized when the significant
                risks and rewards of ownership have been transferred to the buyer
                at the
                time of delivery and the sales price is fixed or determinable and
                collection is reasonably assured;
                and


(ii)
            interest
                income is recognized on an accrual
                basis.





We
      have
      not yet generated any revenue as of June 30, 2008.




Maintenance
      or repairs are charged to expense as incurred. Upon sale or disposition, the
      applicable amounts of asset cost and accumulated depreciation are removed from
      the accounts and the net amount less proceeds from disposal is charged or
      credited to income.





*Income
      Taxes.* The
      Company uses the asset and liability method of accounting for income taxes
      pursuant to SFAS No. 109 “Accounting for Income Taxes”. Under the asset and
      liability method of SFAS 109, deferred tax assets and liabilities are recognized
      for the future tax consequences attributable to temporary differences between
      the financial statements carrying amounts of existing assets and liabilities
      and
      loss carry forwards and their respective tax bases. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled.





*Comprehensive
      income.* The
      Company has adopted SFAS 130, “Reporting Comprehensive Income”, which
      establishes standards for reporting and display of comprehensive income, its
      components and accumulated balances. Components of comprehensive income include
      net income and foreign currency translation adjustments.





*Foreign
      currency translation* . The
      functional currency of the Company is RMB. The Company maintains its financial
      statements in the functional currency. Monetary assets and liabilities
      denominated in currencies other than the functional currency are translated
      into
      the functional currency at rates of exchange prevailing at the balance sheet
      date. Transactions denominated in currencies other than the functional currency
      are translated into the functional currency at the exchanges rates prevailing
      at
      the dates of the transaction. Exchange gains or losses arising from foreign
      currency transactions are included in the determination of net income for the
      respective periods.





For
      financial reporting purposes, the financial statements of the Company which
      are
      prepared using the functional currency have been translated into United States
      dollars. Assets and liabilities are translated at the exchange rates at the
      balance sheet dates and revenue and expenses are translated at the average
      exchange rates and shareholders’ equity is translated at historical exchange
      rates. Any translation adjustments resulting are not included in determining
      net
      income but are included in foreign exchange adjustment to other comprehensive
      income, a component of shareholders’ equity.





**Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk**





The
      Company is subject to certain market risks, including changes in interest rates
      and currency exchange rates.  The Company does not undertake any specific
      actions to limit those exposures.




**Item
      4T.**  **Evaluation
      of Disclosure Controls and Procedures**




As
        of the
        end of the period covered by this report, the Company carried out, under
        the
        supervision and with the participation of the Company’s management , including
        it’s Chief Executive Officer and Chief Financial Officer, an evaluation of the
        effectiveness of the design and operation of the Company’s disclosure controls
        and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
        Exchange Act of 1934) in ensuring that information required to be disclosed
        by
        the Company in its reports is recorded, processed, summarized and reported
        within the required time periods. In carrying out that evaluation, management
        identified a material weakness (as defined in Public Company Accounting
        Oversight Board Standard No. 2) in our internal control over financial
        reporting.
 
 The
        material weakness identified by Management consisted of inadequate staffing
        and
        supervision within the bookkeeping and accounting operations of the Company.
        The
        relatively small number of employees who have bookkeeping and accounting
        functions prevents us from segregating duties within the Company’s internal
        control system. The inadequate segregation of duties is a weakness because
        it
        could lead to the untimely identification and resolution of accounting and
        disclosure matters or could lead to a failure to perform timely and effective
        reviews. Accordingly, based on their evaluation of the Company’s disclosure
        controls and procedures as of June 30, 2008, the Company’s Chief Executive
        Officer and its Chief Financial Officer have concluded that, as of that date,
        the Company’s controls and procedures were not effective for the purposes
        described above. The Company intends to take steps to remediate such procedures
        as soon as reasonably possible.
 
 There
        was
        no change in the Company’s internal control over financial reporting (as defined
        in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)
        during the period ended June 30, 2008, that has materially affected or is
        reasonably likely to affect the Company’s internal control over financial
        reporting.


12





***Management’s
      Report on Internal Controls over Financial
      Reporting***




Internal
      control over financial reporting is a process to provide reasonable assurance
      regarding the reliability of consolidated financial reporting and the
      preparation of financial statements for external purposes in accordance with
      U.S. generally accepted accounting principles.  There has been no change in
      the Company’s internal control over financial reporting during the quarter ended
      June 30, 2008 that has materially affected, or is reasonably likely to
      materially affect, the Company’s internal control over financial
      reporting.




The
      Company’s management, including the Company’s CEO and CFO, does not expect that
      the Company’s disclosure controls and procedures or the Company’s internal
      controls will prevent all errors and all fraud. A control system, no matter
      how
      well conceived and operated, can provide only reasonable, not absolute,
      assurance that the objectives of the control system are met. Further, the design
      of a control system must reflect the fact that there are resource constraints,
      and the benefits of controls must be considered relative to their costs. Because
      of the inherent limitations in all control systems, no evaluation of the
      controls can provide absolute assurance that all control issues and instances
      of
      fraud, if any, within the Company have been detected.





**PART
      II - OTHER INFORMATION**


**Item
      1.    Legal Proceedings.**




None.





**Item
      1A.    Risk Factors.**





An
      investment in our common stock is speculative and involves an extremely high
      degree of risk and uncertainty. You should carefully consider the risks
      described below, together with the other information contained in this report,
      including the consolidated financial statements and notes thereto of our
      Company, before deciding to invest in our common stock. The risks described
      below are not the only ones facing our Company. Additional risks not presently
      known to us or that we presently consider immaterial may also adversely affect
      our Company. If any of the following risks occur, our business, financial
      condition and results of operations and the value of our common stock could
      be
      materially and adversely affected.





RISKS
      RELATING TO OUR COMPANY





WE
      ARE AN
      EARLY STAGE COMPANY AND HAVE NO OPERATING HISTORY ON WHICH TO EVALUATE OUR
      POTENTIAL FOR FUTURE SUCCESS.





Our
      company was formed in July 2007, and to date has only 9 months of formation,
      planning, analysis and testing. In addition, we have no operating history under
      our proposed business model upon which you can evaluate our business and
      prospects. To date, we have sent one of our prototype products for testing
      at a
      testing facility and are awaiting results from those tests. Initially, we intend
      to seek EU standard certification of this product and are awaiting the results
      of that process.





Our
      lack
      of operating history may prevent a meaningful evaluation of our business,
      financial performance and prospects. Subject to successful product testing
      and
      receiving a purchase order for such product in the second quarter of 2008,
      we
      plan to have our first solar cell manufactured using a third-party manufacturer
      to produce the product. We have not shipped any number of solar cells and have
      not recognized any revenues from sales of our solar cells.





There
      can
      be no assurance that we will derive significant revenues from products
      sales.




We
      are an
      early stage company. You must consider the risks and uncertainties frequently
      encountered by early stage companies in new and rapidly evolving markets such
      as
      competing technologies, lack of customer acceptance of a new or improved service
      or product and obsolescence of the technology before it can be fully
      commercialized. If we are unsuccessful in addressing these risks and
      uncertainties, our business, results of operations and financial condition
      will
      be materially and adversely affected.





13





Doubts
      exist about our ability to continue as a going concern.





IF
      WE DO
      NOT OBTAIN ADDITIONAL CAPITAL, WE MAY BE UNABLE TO SUSTAIN OUR
      BUSINESS.





Our
      operating plan for 2008 is focused on setting up a WFOE operation in Nanyang
      City, Henan Province, China, and getting approval for EU standard certification
      in order for us to generate sales in the EU market. We estimate that
      approximately $150,000 will be required to support this plan for the next 12
      months. Since our inception in 2007, we have not received any funds from the
      issuance of common stock. We are actively seeking additional funding, but to
      date have not entered into any agreements or other arrangements for such
      financing. There can be no assurance that the required additional financing
      will
      be available on terms favorable to us or at all.





Without
      additional funding, the company will not be able to pursue its business model.
      If adequate funds are not available or are not available on acceptable terms
      when required, we would be required to significantly curtail our operations
      and
      would not be able to fund the development of the business envisioned by our
      business model. These circumstances could have a material adverse effect on
      our
      business and our ability to continue to operate as a going concern. If
      additional funds are raised through the issuance of equity or convertible debt
      securities, our then existing shareholders may experience substantial dilution,
      and such securities may have rights, preferences and privileges senior to those
      of our common stock.





IF
      WE
      NEED ADDITIONAL CAPITAL TO FUND OUR GROWING OPERATIONS, WE MAY NOT BE ABLE
      TO
      OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR
      OPERATIONS.





As
      we
      implement our growth strategies, we may experience increased capital needs
      and
      we may not have enough capital to fund future operations without additional
      capital investments. Our capital needs will depend on numerous factors,
      including (1) our profitability; (2) the release of competitive products by
      our
      competition; (3) the level of our investment in research and development; and
      (4) the amount of our capital expenditures. We cannot assure you that we will
      be
      able to obtain capital in the future to meet our needs.





If
      we
      cannot obtain additional funding, we may be required to:




•
            reduce
                our investments in research and development;•
            limit
                our marketing efforts; and•
            decrease
                or eliminate capital expenditures.




Such
      reductions could have a material adverse affect our business and our ability
      to
      compete.




Even
      if
      we do find a source of additional capital, we may not be able to negotiate
      acceptable terms and conditions for receiving the additional capital. Any future
      capital investments could dilute or otherwise materially and adversely affect
      the holdings or rights of our existing shareholders. In addition, new equity
      or
      convertible debt securities issued by us to obtain financing could have rights,
      preferences and privileges senior to our common stock. We cannot give you any
      assurance that any additional financing will be available to us, or if
      available, will be on terms favorable to us.





WE
      MAY
      HAVE DIFFICULTY RAISING NECESSARY CAPITAL TO FUND OPERATIONS AS A RESULT OF
      MARKET PRICE VOLATILITY OF OUR SHARES OF COMMON STOCK.





If
      our
      business development plans are successful, we may require additional financing
      to continue to develop and exploit existing and new technologies and to expand
      into new markets. The exploitation of our technologies may, therefore, be
      dependent upon our ability to obtain equity financing through debt and equity
      or
      other means. In recent years, the securities markets in the United States have
      experienced a high level of price and volume volatility, and the market price
      of
      securities of many companies have experienced wide fluctuations that have not
      necessarily been related to the operations, performance, underlying asset values
      or prospects of such companies.





14





For
      these
      reasons, our shares of common stock can also be expected to be subject to
      volatility resulting from purely market forces over which we will have no
      control. Such volatility may make it more difficult to find investors willing
      to
      invest in our common stock, or to negotiate equity financing or terms that
      are
      acceptable to us.





WE
      HAVE
      INCURRED LOSSES IN CERTAIN PRIOR PERIODS AND MAY INCUR LOSSES IN THE
      FUTURE.





We
      incurred net losses of $156,911 for the period from inception (July 24, 2007)
      to
      December 31, 2007, and we may incur losses in the future. We expect our costs
      and expenses to increase as we expand our operations. Our ability to achieve
      and
      maintain profitability depends on the growth rate of the solar power market,
      the
      continued global market acceptance of solar power products in general and our
      future products in particular, the pricing trend of solar power products, the
      competitiveness of our proposed products as well as our ability to provide
      new
      products to meet the demands of our customers and our ability to control our
      costs and expenses. We may not be able to achieve or sustain profitability
      on a
      quarterly or annual basis.





THERE
      ARE
      SIGNIFICANT RISKS IN EXECUTING OUR BUSINESS STRATEGY AND OUR BUSINESS PLANS
      COULD CHANGE





To
      execute our business plan, we will need to recruit over 300 employees, secure
      raw materials from suppliers, set up a manufacturing facility, establish a
      distribution channel and secure purchase orders from customers. Each of these
      elements carries substantial risk in our ability to execute on them, including
      our ability to finance the costs -- estimated at $20 million for the cost to
      equip a facility to manufacture three product lines -- and our ability to
      successfully manage the startup. These uncertainties could cause us to
      significantly change our strategy.





WE
      WILL
      HAVE BROAD DISCRETION OVER THE USE OF PROCEEDS FROM OUR PUBLIC OFFERING AND
      MAY
      USE THE PROCEEDS IN A MANNER SIGNIFICANTLY DIFFERENT FROM OUR CURRENT PLANS.





While
      we
      currently expect to use the net proceeds from our public offering for general
      corporate purposes, including expenses to set up a Wholly Foreign Owned Foreign
      Enterprise (WFOE) in Nanyang City, Henan province, China, working capital,
      application fees to receive EU standard approval, and marketing and sales
      expenses, we will have broad discretion to adjust the application and allocation
      of the net proceeds. Our expectations regarding future business needs may prove
      to be inaccurate. Accordingly, we will retain broad discretion in the allocation
      of the net proceeds from our public offering, and we reserve the right to change
      the use of these proceeds as a result of contingencies. The success of our
      operations is influenced by capital expenditures and working capital allocations
      and will substantially depend upon our discretion and judgment with respect
      to
      the application and allocation of the net proceeds from our public offering.





TO
      MAXIMIZE OUR POTENTIAL FOR FUTURE GROWTH AND ACHIEVE OUR EXPECTED REVENUES,
      WE
      NEED TO MANAGE GROWTH IN OUR CURRENT OPERATIONS.





In
      order
      to maximize potential growth, we believe that we must establish our
      manufacturing and marketing operations. This will place a significant strain
      on
      our management and on our operational, accounting, and information systems.
      We
      expect that as we grow we will need to improve our financial controls, operating
      procedures, and management information systems to handle increased operations.
      We will also need to effectively train, motivate, and manage our employees.
      Our
      failure to manage our growth could disrupt our operations and ultimately prevent
      us from generating the revenues we expect.





WE
      CANNOT
      ASSURE YOU THAT OUR ORGANIC GROWTH STRATEGY WILL BE SUCCESSFUL.





One
      of
      our growth strategies is to grow organically by increasing the distribution
      and
      sales of our products in new markets outside of China. However, many obstacles
      to entering new markets exist, such as the costs associated with entering into
      new markets, developing and implementing effective marketing efforts abroad
      and
      maintaining attractive foreign exchange ratios. We cannot, therefore, assure
      you
      that we will be able to successfully overcome such obstacles and establish
      our
      products in any additional markets. Our inability to successfully implement
      our
      organic growth strategy may have a negative impact on our growth strategy and
      on
      our future financial condition, results of operations or cash
      flows.





15





WE
      CANNOT
      ASSURE YOU THAT OUR ACQUISITION GROWTH STRATEGY WILL BE SUCCESSFUL.





In
      addition to our organic growth strategy we also expect to grow through strategic
      acquisitions. We intend to pursue opportunities to acquire businesses that
      are
      complementary or related to our existing product lines or may execute a
      potential joint venture or acquisition with a silicon mine or other strategic
      partner. We may not be able to locate suitable acquisition or joint venture
      candidates at prices that we successfully consider appropriate. If we do
      identify an appropriate candidate, we may not be able to successfully negotiate
      the terms of an acquisition, finance the acquisition on terms that are
      satisfactory to us or if the acquisition occurs successfully, integrate the
      acquired business into our existing business. Acquisitions of businesses or
      other material operations may require debt financing or additional equity
      financing, resulting in leverage or dilution of ownership. Integration of
      acquired business operations could disrupt our business by diverting management
      away from day-to-day operations. The difficulties of integration may be
      increased by the necessity of coordinating geographically dispersed
      organizations, integrating personnel with disparate business backgrounds and
      combining different corporate cultures. We also may not be able to maintain
      key
      employees or customers of an acquired business or realize cost efficiencies
      or
      synergies or other benefits we anticipated when selecting our acquisition
      candidates. In addition, we may need to record write-downs from future
      impairments of intangible assets, which could reduce our future reported
      earnings. At times, acquisition candidates may have liabilities or adverse
      operating issues that we fail to discover through due diligence prior to the
      acquisition which will be required to comply with laws of the People's Republic
      of China ("PRC"), to the extent applicable. There can be no assurance that
      any
      proposed acquisition will be able to comply with PRC requirements, rules and/or
      regulations, or that we will successfully obtain governmental approvals to
      the
      extent required, which may be necessary to consummate such
      acquisitions.





IF
      WE ARE
      NOT ABLE TO IMPLEMENT OUR STRATEGIES TO ACHIEVE OUR BUSINESS OBJECTIVES, OUR
      BUSINESS OPERATIONS AND FINANCIAL PERFORMANCE MAY BE ADVERSELY
      AFFECTED.





Our
      business plan and growth strategy is based on currently prevailing circumstances
      and the assumption that certain circumstances will or will not occur, as well
      as
      the inherent risks and uncertainties involved in various stages of development.
      However, there is no assurance that we will be successful in implementing our
      strategies or that our strategies, even if implemented, will lead to the
      successful achievement of our objectives. If we are not able to successfully
      implement our strategies, our business operations and financial performance
      may
      be adversely affected.





WE
      DEPEND
      ON OUR KEY MANAGEMENT PERSONNEL AND THE LOSS OF THEIR SERVICES COULD ADVERSELY
      AFFECT OUR BUSINESS.





We
      place
      substantial reliance upon the efforts and abilities of our executive officers,
      Wensheng Chen, our Founder and Chairman; Ling Chen, our President; Jun Ren,
      Vice
      President - Operations; and Renmin Li, Vice President - Product Development
      & Research. The loss of the services of any of our executive officers could
      have a material adverse effect on our business, operations, revenues or
      prospects. We do not maintain key man life insurance on the lives of these
      individuals. Mr. Wensheng Chen has significant activities outside the company
      that put demands on his time that could detract from his management of the
      company’s business.





FAILURE
      TO ATTRACT AND RETAIN PERSONNEL COULD HAVE AN ADVERSE IMPACT ON OUR
      OPERATIONS.





Our
      future success depends on our ability to identify, attract, hire, retain and
      motivate other well-qualified managerial, technical, sales and marketing
      personnel. There is intense competition for these individuals, and there can
      be
      no assurance that these professionals will be available in the market or that
      we
      will be able to meet their compensation requirements.





RISKS
      RELATED TO OUR BUSINESS





OUR
      PRODUCTS MUST BE CERTIFIED BY AUTHORITIES IN THE GEOGRAPHIC REGIONS IN WHICH
      WE
      INTEND TO SEEK ORDERS




Initially
      we intend to sell our products in the EU. Achieving EU standard certification
      is
      a pre requisite for sales in the EU.




The
      International Electrotechnical Commission (IEC) is an organization that prepares
      and publishes International Standards for all electrical, electronic and related
      technologies — collectively known as "electrotechnology". The IEC also manages
      conformity assessment schemes that certify that equipment, systems or components
      conform to its International Standards.





16





Kuong
      U
      is currently applying for these certificates to achieve the EU standard for
      its
      Photovoltaic Modules, model GYSP-175. To assist in securing an EU standard,
      the
      company is having a prototype product tested by an independent testing facility.
      On January 14, 2008, Kuong U entered an agreement with Arizona State University.
      During the agreement, Photovoltaic Testing Laboratory at ASU will conduct
      Crystalline Silicon Terrestrial Photovoltaic Modules - Design Qualification
      and
      Type Approval (IEC 61215) tests and Photovoltaic module safety qualification
      (IEC 61730-2) tests on Kuong U’s GYSP-175 photovoltaic modules. A total of ten
      unconditioned production modules and one laminate (frameless modules) were
      sent
      to the testing lab to complete the test program. Under the agreement, Kuong
      U
      will pay $37,650 to ASU for its services. The agreement period is from January
      10, 2008 to December 31, 2008.





One
      of
      the few institutes in the EU that conducts test and issues EU standard
      certifications is the VDE Testing & Certifications Institute in Germany
      (VDE). If we achieve favorable test results from our ASU testing, the testing
      lab will transfer a test data report to VDE Testing & Certifications
      Institute in Germany. VDE is a professional organization of electrical
      engineers; issues, in collaboration with German Institute for Standardization
      (DIN), standards for the field of electrical engineering. It also conducts
      testing and certification under the EU standard (much like UL in the United
      States). According to http://www.vde.com, The VDE Testing and Certification
      Institute is accredited on a national and international level for the area
      of
      testing and certification of electrotechnical equipment, components and systems.
      Testing of electrotechnical products is conducted for safety, electromagnetic
      compatibility and other characteristics. The results of testing are evaluated
      scientifically and contribute to the development of electrotechnical
      standards.





Kuong
      U
      contacted VDE directly and established an evaluation, to include the
      construction evaluation requirements and testing services for VDE Certification
      based on test report from ASU of IEC 61730-1 Photovoltaic module safety
      qualification Part 1 (IEC 61730-1); 61730-2 module or materials tests, and
      factory inspection requirement; and IEC61215. Total invoiced fees for VDE
      certification and testing services are 7,956 EUR





If
      we
      receive VDE standard certificates of IEC 61730-1, and 61730-2, and IEC 61215,
      Kuong U would be able to market and sell its Photovoltaic Modules, GYSP-175,
      to
      EU countries. However, there is not guarantee that we will receive VDE standard
      certificates. Currently our anticipated sales of PV modules and solar lighting
      systems do not require industry standard approval if sold to region in Africa
      and Asia. Failure to achieve certification could limit our sales to these
      regions.





SUPPLIERS
      ARE CURRENTLY EXPERIENCING AN INDUSTRY-WIDE SHORTAGE OF SILICON INGOTS AND
      WAFERS. THE PRICES THAT WE WOULD PAY FOR SILICON INGOTS AND WAFERS HAVE
      INCREASED IN THE PAST AND WE EXPECT PRICES MAY CONTINUE TO INCREASE IN THE
      FUTURE, WHICH MAY MATERIALLY AND ADVERSELY AFFECT OUR REVENUE GROWTH AND
      DECREASE PROFIT MARGINS AND PROFITABILITY.





Silicon
      ingots and wafers are an essential raw material in our production of wafers
      and
      PV products. Silicon is created by refining quartz or sand, and is melted and
      grown into crystalline ingots or other forms. Some of our potential suppliers
      procure silicon ingots from companies that specialize in ingot growth and then
      slice these ingots into wafers. We will depend on our suppliers for timely
      delivery of silicon ingots and wafers in sufficient quantities and satisfactory
      quality, and any disruption in supplies, including fluctuations in the delivery
      of supplies or inability to obtain silicon ingots and wafers at an acceptable
      cost or at all, will materially and adversely affect our business and
      operations.





There
      is
      currently an industry-wide shortage of silicon ingots and silicon wafers, which
      has resulted in significant price increases. The average prices of silicon
      ingots and silicon wafers may continue to increase. Moreover, we expect the
      shortages of silicon ingots and silicon wafers to continue as the solar power
      industry continues to grow and as additional manufacturing capacity is added.
      Silicon wafers are also used in the semiconductor industry generally and any
      increase in demand from that sector will exacerbate the current shortage. The
      production of silicon ingots and silicon wafers are capital intensive and adding
      manufacturing capacity requires significant lead time. While we are aware that
      several new facilities for the manufacture of silicon ingots and silicon wafers
      are under construction and many existing facilities are expanding their
      production capacities, we do not believe that the supply shortage will be
      remedied in the near term. We expect that the demand for silicon ingots and
      silicon wafers will continue to outstrip supply for the foreseeable
      future.





Since
      some suppliers do not themselves manufacture silicon but instead purchase their
      requirements from other vendors, it is possible that these suppliers will not
      be
      able to obtain sufficient silicon to satisfy our requirements. In addition,
      companies in the PV industry will compete with companies in the semiconductor
      industry for silicon ingots and wafers, and companies in that sector typically
      have greater purchasing power and market influence than companies in the PV
      industry. If we acquire ingots and silicon wafers from suppliers through
      short-term supply arrangements we would be subject to the risk that our
      suppliers may cease supplying silicon ingots and silicon wafers to us for any
      reason, including due to uncertainties in their financial viability. These
      suppliers could also choose not to honor such contracts. If either of these
      circumstances occurs, our supply of critical raw materials at reasonable costs
      and our basic ability to conduct our business could be severely restricted.
      Moreover, since some of our supply contracts may require prepayment of a
      substantial portion of the contract price, we may not be able to recover such
      prepayments and we would suffer loses should such suppliers fail to fulfill
      their delivery obligations under the contracts. Furthermore, if we do not fix
      the price for the silicon ingots and silicon wafers under supply contracts,
      the
      price we will need to pay may need to be adjusted to reflect the prevailing
      market price around the time of delivery, which may be higher than we expect.
      Increases in the prices of silicon ingots and silicon wafers could increase
      our
      production costs and may materially and adversely impact our cost of revenue,
      gross margins and profitability.





17





There
      are
      a limited number of silicon ingot and silicon wafer suppliers, and many of
      our
      potential competitors also purchase silicon ingots and silicon wafers from
      these
      suppliers. Our potential competitors may have longer and stronger relationships
      with these suppliers than we do. Our potential competitors may also have in
      place multi-year supply agreements with these suppliers with longer terms and
      may be able to obtain silicon ingots and silicon wafers at a lower cost than
      we
      do. Moreover, the inability to obtain silicon ingots and silicon wafers at
      commercially reasonable prices or at all would harm our ability to meet existing
      and future customer demand for our products, and could cause us to make fewer
      shipments, lose customers and market share and generate lower than anticipated
      revenue, thereby materially and adversely affecting our business, financial
      condition, results of operations and prospects.





IF
      PV
      TECHNOLOGY IS NOT SUITABLE FOR WIDESPREAD ADOPTION, OR SUFFICIENT DEMAND FOR
      PV
      PRODUCTS DOES NOT DEVELOP OR TAKES LONGER TO DEVELOP THAN WE ANTICIPATED, OUR
      SALES MAY NOT CONTINUE TO INCREASE OR MAY EVEN DECLINE, AND WE MAY BE UNABLE
      TO
      SUSTAIN PROFITABILITY.





The
      PV
      market is at a relatively early stage of development and the extent to which
      PV
      products will be widely adopted is uncertain. Market data in the PV industry
      are
      not as readily available as those in other more established industries where
      trends can be assessed more reliably from data gathered over a longer period
      of
      time. If PV technology proves unsuitable for widespread adoption or if demand
      for PV products fails to develop sufficiently, we may not be able to grow our
      business or generate sufficient revenues to achieve profitability. In addition,
      demand for PV products in our targeted markets, including China, may not develop
      or may develop to a lesser extent than we anticipated. Many factors may affect
      the viability of widespread adoption of PV technology and demand for PV
      products, including:





•
            availability
                of government subsidies and incentives to support the development
                of the
                PV industry;





•
            cost-effectiveness
                of PV products compared to conventional and other non-solar energy
                sources
                and products;





•
            performance
                and reliability of PV products compared to conventional and other
                non-solar energy sources and
                products;





•
            success
                of other alternative energy generation technologies, such as fuel
                cells,
                wind power and biomass;





•
            fluctuations
                in economic and market conditions that affect the viability of
                conventional and non-solar alternative energy sources, such as increases
                or decreases in the prices of oil, coal, natural gas and other fossil
                fuels;





•
            the
                cost and availability of credit, loans and other funding mechanisms
                to
                finance the installation and maintenance of PV systems. For example,
                a
                rise in interest rates would likely render existing financings more
                expensive and be an obstacle for potential financings that would
                otherwise
                spur the growth of the PV industry;





18




•
            capital
                expenditures by end users of PV products, which tend to decrease
                when the
                economy slows down; and





•
            deregulation
                of the electric power industry and broader energy
                industry.





WE
      POTENTIALLY FACE INTENSE COMPETITION FROM OTHER COMPANIES PRODUCING SOLAR ENERGY
      AND OTHER RENEWABLE ENERGY PRODUCTS.





The
      PV
      market is intensely competitive and rapidly evolving. According to Photon
      International’s survey in March 2006, as of the end of 2005, 94 companies in the
      world produced PV cells and 153 companies produced PV modules. Many of our
      potential competitors have established more prominent market positions, and
      if
      we fail to attract and retain customers and establish successful distribution
      networks in our target markets for our products, we will be unable to generate
      sales. Our competitors include PV divisions of large conglomerates such as
      Royal
      Sanyo Group and Sharp Corporation, specialized cell manufacturers such as
      Q-Cells AG, as well as integrated manufacturers of PV products such as Renewable
      Energy Corporation and SolarWorld AG. Some of our potential competitors have
      also become vertically integrated, from upstream silicon wafer manufacturing
      to
      PV system integration. We expect to compete with future entrants to the PV
      market that offer new technological solutions. We may also face competition
      from
      semiconductor manufacturers, a few of which have already announced their
      intention to start production of PV cells. Many of our potential competitors
      are
      developing or currently producing products based on new PV technologies,
      including thin film, ribbon, sheet and nano technologies, which they believe
      will ultimately cost the same as or less than crystalline silicon technologies
      similar to ours. In addition, the entire PV industry also faces competition
      from
      conventional and non-solar renewable energy technologies. Due to the relatively
      high manufacturing costs compared to most other energy sources, solar energy
      is
      generally not competitive without government incentive programs.





Most
      of
      our potential competitors have substantially greater financial, technical,
      manufacturing and other resources than we do. Greater size in some cases
      provides them with a competitive advantage with respect to manufacturing costs
      because of their economies of scale and their ability to purchase raw materials
      at lower prices. For example, those companies that also manufacture
      semiconductors may source both semiconductor grade silicon wafers and solar
      grade silicon wafers from the same supplier. As a result, those companies may
      have stronger bargaining power with the supplier and have an advantage over
      us
      in negotiating favorable pricing, as well as securing silicon ingot and silicon
      wafer supplies at times of shortages. Many of our potential competitors also
      have greater brand name recognition, more established distribution networks
      and
      larger customer bases. In addition, many of our potential competitors have
      well-established relationships with our current and potential distributors
      and
      have extensive knowledge of our target markets. As a result, they may be able
      to
      devote greater resources to the research, development, promotion and sale of
      their products or respond more quickly to evolving industry standards and
      changes in market conditions than we can. Our failure to adapt to changing
      market conditions and to compete successfully with existing or new entrants
      may
      materially and adversely affect our financial condition and results of
      operations. Our failure to develop and introduce new PV products could render
      our products uncompetitive or obsolete, and reduce our sales and market
      share.





The
      PV
      industry is rapidly evolving and competitive. We will need to invest significant
      financial resources in research and development to keep pace with technological
      advances in the PV industry and to effectively compete in the future. However,
      research and development activities are inherently uncertain, and we might
      encounter practical difficulties in commercializing our research results. Our
      significant expenditures on research and development may not reap corresponding
      benefits. A variety of competing PV technologies that other companies may
      develop could prove to be more cost-effective and have better performance than
      our PV products. Therefore, our development efforts may be rendered obsolete
      by
      the technological advances of others. Breakthroughs in PV technologies that
      do
      not use crystalline silicon could mean that companies such as us that currently
      rely entirely on crystalline silicon would encounter a sudden, sharp drop in
      sales. Our failure to develop and introduce new PV products could render our
      products uncompetitive or obsolete, and result in a decline in our market
      share.





INTENSE
      COMPETITION FROM EXISTING AND NEW ENTITIES MAY ADVERSELY AFFECT OUR REVENUES
      AND
      PROFITABILITY.





We
      compete with other companies, many of whom are developing, or can be expected
      to
      develop, products similar to ours. Some of our competitors are more established
      than we are, and have significantly greater financial, technical, marketing
      and
      other resources than we presently possess. Some of our competitors have greater
      name recognition and a larger customer base. These competitors may be able
      to
      respond more quickly to new or changing opportunities and customer requirements
      and may be able to undertake more extensive promotional activities, offer more
      attractive terms to customers, and adopt more aggressive pricing policies.
      We
      intend to create greater brand awareness for our brand name so that we can
      successfully compete with our competitors. We cannot assure you that we will
      be
      able to compete effectively with current or future competitors or that the
      competitive pressures we face will not harm our business.





19





OUR
      DEPENDENCE ON A LIMITED NUMBER OF SUPPLIERS FOR A SUBSTANTIAL PORTION OF SILICON
      INGOTS AND SILICON WAFERS COULD PREVENT US FROM DELIVERING OUR PRODUCTS IN
      A
      TIMELY MANNER TO OUR CUSTOMERS IN THE REQUIRED QUANTITIES, WHICH COULD RESULT
      IN
      ORDER CANCELLATIONS, DECREASED REVENUE AND LOSS OF MARKET SHARE.





From
      company inception to April 30, 2008, we have not purchased any silicon ingots
      and silicon wafers. We plan to purchase silicon wafer from Suntech Power
      Holdings Co.(NYSE:STP), Motech Industries, Inc. and JA Solar Holding (NASDAQ:
      JASO). To develop or secure our relationships with these suppliers, we may
      extend interest-free loans or make prepayments to them, or grant them warrants
      or other rights to purchase our ordinary shares, which could increase our costs
      or expenses. If we fail to develop or maintain our relationships with these
      or
      our other suppliers, we may be unable to manufacture our products, our products
      may only be available at a higher cost or after a long delay, or we could be
      prevented from delivering our products to our customers in the required
      quantities, at competitive prices and on acceptable terms of delivery. Problems
      of this kind could cause us to experience order cancellations, decreased revenue
      and loss of market share. In general, the failure of a supplier to supply
      materials and components that meet our quality, quantity and cost requirements
      in a timely manner due to lack of supplies or other reasons could impair our
      ability to manufacture our products or could increase our costs, particularly
      if
      we are unable to obtain these materials and components from alternative sources
      in a timely manner or on commercially reasonable terms. We cannot assure you
      that we will not experience shortfalls of silicon ingots or silicon wafers
      from
      our suppliers in the future or that, in the event of such shortfalls, we will
      be
      able to find other silicon ingots and silicon wafers suppliers to satisfy our
      production needs. Any disruption in the supply of silicon wafers to us may
      adversely affect our business, financial condition, results of operations and
      business prospects.





OUR
      DEPENDENCE ON A LIMITED NUMBER OF CUSTOMERS MAY CAUSE SIGNIFICANT FLUCTUATIONS
      OR DECLINES IN OUR REVENUES.





We
      plan
      to sell a substantial portion of our wafers and PV products to a limited number
      of customers, including distributors, engineering design firms, system
      integrators, other value-added resellers, as well as integrated manufacturers
      of
      PV products. To date, we have not had any customers nor any sales. We plan
      to
      conduct our sales to customers typically through non-exclusive, short-term
      arrangements where the contract prices are typically agreed upon between our
      customers and us on a quarterly basis, and as such, our actual revenues can
      vary
      significantly. We anticipate that our dependence on a limited number of
      customers would continue for the foreseeable future. Consequently, any one
      of
      the following events may cause material fluctuations or declines in our revenues
      and have a material adverse effect on our results of operations:





·
            reduction,
                delay or cancellation of orders from one or more significant
                customers;





·
            selection
                by one or more significant customers of products competitive with
                ours;





·
            loss
                of one or more significant customers and our failure to identify
                additional or replacement customers;
                and





·
            failure
                of any significant customers to make timely payment for our
                products.




CHANGES
      TO EXISTING REGULATIONS OVER THE UTILITY SECTOR AND THE PV INDUSTRY MAY PRESENT
      TECHNICAL, REGULATORY AND ECONOMIC BARRIERS TO THE PURCHASE AND USE OF PV
      PRODUCTS, WHICH MAY SIGNIFICANTLY REDUCE DEMAND FOR OUR PRODUCTS.





The
      market for power generation products is heavily influenced by government
      regulations and policies concerning the electric utility industry, as well
      as
      the internal policies of electric utilities companies. These regulations and
      policies often relate to electricity pricing and technical interconnection
      of
      end user-owned power generation. In a number of countries, these regulations
      and
      policies are being modified and may continue to be modified. End users’
purchases of alternative energy sources, including PV products, could be
      deterred by these regulations and policies, which could result in a significant
      reduction in the potential demand for our PV products. For example, utility
      companies commonly charge fees to larger, industrial customers for disconnecting
      from the electricity transmission grid or for having the capacity to use power
      from the electricity transmission grid for back-up purposes. These fees could
      increase end users’ costs of using our PV products and make our PV products less
      desirable, thereby having an adverse effect on our business, prospects, results
      of operations and financial condition.





20





We
      anticipate that our PV products and their installation will be subject to
      oversight and regulation in accordance with national and local ordinances
      relating to building codes, safety, environmental protection, utility
      interconnection and metering and related matters in various countries. It is
      also burdensome to track the requirements of individual localities and design
      equipment to comply with the varying standards. Any new government regulations
      or utility policies pertaining to our PV products may result in significant
      additional expenses to us, our distributors and end users and, as a result,
      could cause a significant reduction in demand for our PV products.





THE
      REDUCTION OR ELIMINATION OF GOVERNMENT SUBSIDIES AND ECONOMIC INCENTIVES FOR
      ON-GRID SOLAR ENERGY APPLICATIONS COULD CAUSE DEMAND FOR OUR PRODUCTS AND OUR
      REVENUES TO DECLINE.





Almost
      all of our solar cells sold are eventually utilized in the on-grid market,
      where
      the solar power systems are connected to the utility grid and generate
      electricity to feed into the grid. We believe that the near-term growth of
      the
      market for on-grid applications depends in large part on the availability and
      size of government subsidies and economic incentives. The reduction or
      elimination of subsidies and economic incentives may adversely affect the growth
      of this market or result in increased price competition, either of which could
      cause our revenues to decline.





Today,
      when upfront system costs are factored into cost per kilowatt, the cost of
      solar
      power substantially exceeds the cost of power furnished by the electric utility
      grid in many locations. As a result, national and local governmental bodies
      in
      many countries, most notably in Germany, Spain, Italy, the United States and
      China, have provided subsidies and economic incentives in the form of feed-in
      tariffs, rebates, tax credits and other incentives to distributors, system
      integrators and manufacturers of solar power products to promote the use of
      solar energy in on-grid applications and to reduce dependence on other forms
      of
      energy. These government economic incentives could potentially be reduced or
      eliminated altogether. For example, Germany has been a strong supporter of
      solar
      power products and systems, and is a significant market for our customers that
      engage in solar module and system integration businesses. Utilities in Germany
      are generally obligated to purchase electricity generated from grid-connected
      solar power systems at defined feed-in tariff rates, which will decline over
      time according to a predetermined schedule. Specifically, German subsidies
      decline at a rate of 5.0% to 6.5% per year for systems installed after 2006
      based on the type and size of the solar power systems, and discussions are
      currently underway about amending the incentives for solar power systems under
      the German Renewable Energy Law. Any political or market changes in Germany
      could result in significant reductions or eliminations of subsidies or economic
      incentives, such as a more accelerated reduction of feed-in tariffs than as
      planned according to the current schedule. The solar power industry is currently
      moving towards the economies of scale necessary for solar power to become
      cost-effective in a non-subsidized market. Reductions in, or eliminations of,
      subsidies and economic incentives for on-grid solar energy applications could
      result in decreased demand for our products and cause our revenues to
      decline.





WE
      MAY
      INCUR SIGNIFICANT COSTS TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE
      AND
      ACCOUNTING REQUIREMENTS.





We
      may
      incur significant costs associated with our public company reporting
      requirements, costs associated with newly applicable corporate governance
      requirements, including requirements under the Sarbanes-Oxley Act of 2002 and
      other rules implemented by the Securities and Exchange Commission and the NASDAQ
      OTCBB. We expect all of these applicable rules and regulations to increase
      our
      legal and financial compliance costs and to make some activities more
      time-consuming and costly. We also expect that these applicable rules and
      regulations may make it more difficult and more expensive for us to obtain
      director and officer liability insurance and we may be required to accept
      reduced policy limits and coverage or incur substantially higher costs to obtain
      the same or similar coverage. As a result, it may be more difficult for us
      to
      attract and retain qualified individuals to serve on our board of directors
      or
      as executive officers. We are currently evaluating and monitoring developments
      with respect to these newly applicable rules, and we cannot predict or estimate
      the amount of additional costs we may incur or the timing of such
      costs.





21





PROBLEMS
      WITH PRODUCT QUALITY OR PRODUCT PERFORMANCE MAY CAUSE US TO INCUR WARRANTY
      EXPENSES, DAMAGE OUR MARKET REPUTATION AND PREVENT US FROM ACHIEVING INCREASED
      SALES AND MARKET SHARE.





The
      PV
      modules we plan to sell are typically sold with a 20 year warranty and 1-year
      warranty for defects in materials and workmanship, respectively. The PV modules
      may also contain a 10 year and 20 year warranty against declines of more than
      8.0% and 10.0% of initial power generation capacity, respectively. As a result
      of these warranties, we would bear the risk of extensive warranty claims long
      after we have sold our products and recognized revenues. We have not retained
      any third party insurance to cover certain warranty-related claims on our
      products. We have not sold any PV modules since inception, and accordingly
      none
      of our PV modules has been in use for more than five years. Because our products
      have not been in use, we cannot assure you that our assumptions regarding the
      durability and reliability of our products are reasonable. Our warranty
      provisions in future may be inadequate, and we may have to incur substantial
      expense to repair or replace defective products in the future. Furthermore,
      widespread product failures may damage our market reputation and cause our
      sales
      to decline.





WE
      HAVE
      LIMITED INSURANCE COVERAGE AND MAY INCUR LOSSES RESULTING FROM PRODUCT LIABILITY
      CLAIMS OR BUSINESS INTERRUPTIONS.





If
      we
      secure any PV product sales, we would be exposed to risks associated with
      product liability claims in the event that the use of the PV products sold
      results in injury. Since our proposed products are electricity producing
      devices, it is possible that users could be injured or killed by the products,
      whether by product malfunctions, defects, improper installation or other causes.
      We have not sold any products and, due to limited historical experience, we are
      unable to predict whether product liability claims will be brought against
      us in
      the future or the effect of any resulting adverse publicity on our business.
      Moreover, we may have only limited product liability insurance and may not
      have
      adequate resources to satisfy a judgment in the event of a successful claim
      against us. The successful assertion of product liability claims against us
      could result in potentially significant monetary damages and require us to
      make
      significant payments. In addition, as the insurance industry in China is still
      in an early stage of development, business interruption insurance available
      in
      China offers limited coverage compared to that offered in many other countries.





LEGISLATIVE
      AND REGULATORY ACTIONS AND POTENTIAL NEW ACCOUNTING PRONOUNCEMENTS, INCLUDING
      SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002, ARE LIKELY TO IMPACT OUR FUTURE
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS.





There
      have been certain regulatory changes, including the Sarbanes-Oxley Act of 2002,
      and there may potentially be new accounting pronouncements or additional
      regulatory changes, which will have an impact on our future financial condition
      and results of operations. The Sarbanes-Oxley Act of 2002 and other rule changes
      as well as proposed legislative initiatives will increase our general and
      administrative costs, as we will incur increased legal and accounting fees
      to
      comply with such rule changes. In addition, proposed initiatives are expected
      to
      result in changes in certain accounting and disclosure rules. These and other
      potential changes could materially increase the expenses we report in our
      financial statements and adversely affect our operating results.





Section
      404 of the Sarbanes-Oxley Act of 2002 requires management to assess its internal
      controls over financial reporting and requires auditors to attest to that
      assessment. Current regulations of the Securities and Exchange Commission will
      require us to (1) include this assessment in our Annual Report on Form 10-K
      commencing with the annual report for our fiscal year ending December 31, 2009,
      and (2) include this attestation in our Annual Report on Form 10-K commencing
      with the annual report for our fiscal year ending December 31,
      2009.





We
      will
      incur significant increased costs in implementing and responding to the new
      requirements. In particular, the rules governing the standards that must be
      met
      for management to assess its internal controls over financial reporting under
      Section 404 are complex and require significant documentation, testing and
      possible remediation. Our process of reviewing, documenting and testing our
      internal controls over financial reporting may cause a significant strain on
      our
      management, information systems and resources. We will have to invest in
      additional accounting and software systems. We may be required to hire
      additional personnel and to use outside legal, accounting and advisory services.
      We will also incur additional fees from our auditors as they perform the
      additional services necessary for them to provide their attestation. If we
      are
      unable to favorably assess the effectiveness of our internal controls over
      financial reporting when we are required, or if our independent auditors are
      unable to provide an unqualified attestation report on such assessment, we
      may
      be required to change our internal controls over financial reporting to
      remediate deficiencies. In addition, investors may lose confidence in the
      reliability of our financial statements causing our stock price to
      decline.





22





ACTS
      OF
      TERRORISM, RESPONSES TO ACTS OF TERRORISM AND ACTS OF WAR MAY IMPACT OUR
      BUSINESS AND OUR ABILITY TO RAISE CAPITAL.





Future
      acts of war or terrorism, national or international responses to such acts,
      and
      measures taken to prevent such acts may harm our ability to raise capital or
      our
      ability to operate, especially to the extent we depend upon activities conducted
      in foreign countries, such as China. In addition, the threat of future terrorist
      acts or acts of war may have effects on the general economy or on our business
      that are difficult to predict. We are not insured against damage or interruption
      of our business caused by terrorist acts or acts of war.





RISKS
      RELATING TO THE PEOPLE'S REPUBLIC OF CHINA





CURRENCY
      CONVERSION AND EXCHANGE RATE VOLATILITY COULD ADVERSELY AFFECT OUR FINANCIAL
      CONDITION.





The
      PRC
      government imposes control over the conversion of Renminbi into foreign
      currencies. Under the current unified floating exchange rate system, the
      People's Bank of China publishes an exchange rate, which we refer to as the
      People's Bank of China exchange rate, based on the previous day's dealings
      in
      the inter-bank foreign exchange market. Financial institutions authorized to
      deal in foreign currency may enter into foreign exchange transactions at
      exchange rates within an authorized range above or below the People's Bank
      of
      China exchange rate according to market conditions. Pursuant to the Foreign
      Exchange Control Regulations of the PRC issued by the State Council which came
      into effect on April 1, 1996, and the Regulations on the Administration of
      Foreign Exchange Settlement, Sale and Payment of the PRC which came into effect
      on July 1, 1996, regarding foreign exchange control, conversion of Renminbi
      into
      foreign exchange by Foreign Investment Enterprises, for use on current account
      items, including the distribution of and profits to foreign investors, is
      permissible. Conversion of Renminbi into foreign currencies for capital account
      items, including direct investment, loans, and security investment, is still
      under certain restrictions. On January 14, 1997, the State Council amended
      the
      Foreign Exchange Control Regulations and added, among other things, an important
      provision, which provides that the PRC government shall not impose restrictions
      on recurring international payments and transfers under current account
      items.




Enterprises
      in the PRC (including Foreign Investment Enterprises) which require foreign
      exchange for transactions relating to current account items, may, without
      approval of the State Administration of Foreign Exchange, or SAFE, effect
      payment from their foreign exchange account or convert and pay at the designated
      foreign exchange banks by providing valid receipts and proofs.





TO
      THE
      EXTENT OUR ASSETS ARE LOCATED IN CHINA, ANY DIVIDENDS OR PROCEEDS FROM
      LIQUIDATION IS SUBJECT TO THE APPROVAL OF THE RELEVANT CHINESE GOVERNMENT
      AGENCIES.





If
      we
      pursue our plan to set up a WFOE in Nanyang city, Henan province, China, our
      assets will be predominantly located inside China. Under the laws governing
      foreign invested enterprises in China, dividend distribution and liquidation
      are
      allowed but subject to special procedures under the relevant laws and rules.
      Any
      dividend payment will be subject to the decision of the board of directors
      and
      subject to foreign exchange rules governing such repatriation. Any liquidation
      is subject to both the relevant government agency's approval and supervision
      as
      well the foreign exchange control. This may generate additional risk for our
      investors in case of dividend payment and liquidation.





CHINA’S
      ECONOMIC POLICIES COULD AFFECT OUR BUSINESS.





To
      the
      extent our assets will be located in China and to the extent our revenue will
      be
      derived from our operations in China, our results of business and prospects
      would be subject to the economic, political and legal developments in
      China.





While
      China's economy has experienced a significant growth in the past twenty years,
      growth has been irregular, both geographically and among various sectors of
      the
      economy. The Chinese government has implemented various measures to encourage
      economic growth and guide the allocation of resources. Some of these measures
      benefit the overall economy of China, but may also have a negative effect on
      us.
      For example, our sales results and financial condition may be adversely affected
      by the government control over capital investments or changes in tax regulations
      with our future customers.





The
      economy of China has been transitioning from a planned economy to a more
      market-oriented economy. In recent years the Chinese government has implemented
      measures emphasizing the utilization of market forces for economic reform and
      the reduction of state ownership of productive assets and the establishment
      of
      corporate governance in business enterprises; however, a substantial portion
      of
      productive assets in China are still owned by the Chinese government. In
      addition, the Chinese government continues to play a significant role in
      regulating industry development by imposing industrial policies. It also
      exercises significant control over China's economic growth through the
      allocation of resources, controlling payment of foreign currency-denominated
      obligations, setting monetary policy and providing preferential treatment to
      particular industries or companies.





23





WE
      MAY
      FACE OBSTACLES FROM THE COMMUNIST SYSTEM IN THE PEOPLE'S REPUBLIC OF
      CHINA.





Foreign
      companies conducting operations in The People's Republic of China face
      significant political, economic and legal risks. The Communist regime in The
      People's Republic of China includes a stifling bureaucracy which may hinder
      Western investment.





WE
      MAY
      HAVE DIFFICULTY ESTABLISHING ADEQUATE MANAGEMENT, LEGAL AND FINANCIAL CONTROLS
      IN THE PEOPLE'S REPUBLIC OF CHINA.





The
      People's Republic of China historically has been deficient in Western style
      management and financial reporting concepts and practices, as well as in modern
      banking, computer and other control systems. We may have difficulty in hiring
      and retaining a sufficient number of qualified employees to work in The People's
      Republic of China if we set up a wholly foreign owned enterprises (WFOE) in
      China. As a result of these factors, we may experience difficulty in
      establishing management, legal and financial controls, collecting financial
      data
      and preparing financial statements, books of account and corporate records
      and
      instituting business practices that meet Western standards.





BECAUSE
      OUR ASSETS AND OPERATIONS MIGHT BE LOCATED IN CHINA, YOU MAY HAVE DIFFICULTY
      ENFORCING ANY CIVIL LIABILITIES AGAINST US UNDER THE SECURITIES AND OTHER LAWS
      OF THE UNITED STATES OR ANY STATE.





We
      are a
      holding company, and all of our assets might be located in the Republic of
      China. In addition, our directors and officers are non-residents of the United
      States, and all or a substantial portion of the assets of these non-residents
      are located outside the United States. As a result, it may be difficult for
      investors to effect service of process within the United States upon these
      non-residents, or to enforce against them judgments obtained in United States
      courts, including judgments based upon the civil liability provisions of the
      securities laws of the United States or any state.





There
      is
      uncertainty as to whether courts of the Republic of China would
      enforce:





·
            Judgments
                of United States courts obtained against us or these non-residents
                based
                on the civil liability provisions of the securities laws of the United
                States or any state; or





·
            In
                original actions brought in the Republic of China, liabilities against
                us
                or non-residents predicated upon the securities laws of the United
                States
                or any state. Enforcement of a foreign judgment in the Republic of
                China
                also may be limited or otherwise affected by applicable bankruptcy,
                insolvency, liquidation, arrangement, moratorium or similar laws
                relating
                to or affecting creditors' rights generally and will be subject to
                a
                statutory limitation of time within which proceedings may be
                brought.





THE
      PRC
      LEGAL SYSTEM EMBODIES UNCERTAINTIES, WHICH COULD LIMIT LAW ENFORCEMENT
      AVAILABILITY.





The
      PRC
      legal system is a civil law system based on written statutes. Unlike common
      law
      systems, decided legal cases have little precedence. In 1979, the PRC government
      began to promulgate a comprehensive system of laws and regulations governing
      economic matters in general. The overall effect of legislation over the past
      27
      years has significantly enhanced the protections afforded to various forms
      of
      foreign investment in China. Each of our PRC operating subsidiaries and
      affiliates is subject to PRC laws and regulations. However, these laws and
      regulations change frequently and the interpretation and enforcement involve
      uncertainties. For instance, we may have to resort to administrative and court
      proceedings to enforce the legal protection that we are entitled to by law
      or
      contract. However, since PRC administrative and court authorities have
      significant discretion in interpreting statutory and contractual terms, it
      may
      be difficult to evaluate the outcome of administrative court proceedings and
      the
      level of law enforcement that we would receive in more developed legal systems.
      Such uncertainties, including the inability to enforce our contracts, could
      affect our business and operation. In addition, intellectual property rights
      and
      confidentiality protections in China may not be as effective as in the United
      States or other countries. Accordingly, we cannot predict the effect of future
      developments in the PRC legal system, particularly with regard to the industries
      in which we operate, including the promulgation of new laws. This may include
      changes to existing laws or the interpretation or enforcement thereof, or the
      preemption of local regulations by national laws. These uncertainties could
      limit the availability of law enforcement, including our ability to enforce
      our
      agreements with the government entities and other foreign
      investors.





24





ANY
      DIVIDENDS AND OTHER DISTRIBUTIONS FROM ANY SUBSIDIARIES IN CHINA IS SUBJECT
      TO
      VARIOUS LEGAL AND CONTRACTUAL RESTRICTIONS AND UNCERTAINTIES, AND OUR ABILITY
      TO
      PAY DIVIDENDS OR MAKE OTHER DISTRIBUTIONS TO OUR SHAREHOLDERS ARE NEGATIVELY
      AFFECTED BY THOSE RESTRICTIONS AND UNCERTAINTIES.




We
      plan
      to operate manufacturing facilities in Nanyang city, Henan province in China
      through PRC subsidiaries. As a result, our profits available for distribution
      to
      our shareholders are dependent on the profits available for distribution from
      PRC subsidiaries. If the subsidiary incurs debt on its own behalf, the debt
      instruments may restrict its ability to pay dividends or make other
      distributions, which in turn would limit our ability to pay dividends on our
      shares. Under the current PRC laws, because we are incorporated in the Nevada,
      any PRC subsidiaries would be regarded as Sino-foreign joint venture enterprises
      in China. Although dividends paid by foreign invested enterprises, such as
      wholly foreign-owned enterprises and Sino-foreign joint ventures, are not
      subject to any PRC corporate withholding tax, the PRC laws permit payment of
      dividends only out of net income as determined in accordance with PRC accounting
      standards and regulations. Determination of net income under PRC accounting
      standards and regulations may differ from determination under U.S. GAAP in
      significant aspects, such as the use of different principles for recognition
      of
      revenues and expenses. In addition, if we make additional capital contributions
      to PRC subsidiaries, (which may occur through the capitalization of
      undistributed profits), then additional approval of the PRC government would
      be
      required due to an increase in our registered capital and total investment
      .
      Under the PRC laws, a Sino-foreign joint venture enterprise is required to
      set
      aside a portion of its net income each year to fund designated statutory reserve
      funds. These reserves are not distributable as cash dividends. As a result,
      our
      primary internal source of funds of dividend payments from PRC subsidiaries
      are
      subject to these and other legal and contractual restrictions and uncertainties,
      which in turn may limit or impair our ability to pay dividends to our
      shareholders. Moreover, any transfer of funds from us to PRC subsidiaries,
      either as a shareholder loan or as an increase in registered capital, is subject
      to registration with or approval by PRC governmental authorities. We currently
      do not intend on paying any dividends in the future and expect to retain all
      available funds to support our operations and to finance growth and development
      of our business. We have never declared dividends or paid cash dividends. Our
      board of directors will make any future decisions regarding dividends. We
      currently intend to retain and use any future earnings for the development
      and
      expansion of our business and do not anticipate paying any cash dividends in
      the
      near future. Therefore, any gains on an investment in our common stock will
      likely occur through an increase in our stock price, which may or may not
      occur.





FAILURE
      TO COMPLY WITH PRC REGULATIONS RELATING TO THE ESTABLISHMENT OF OFFSHORE SPECIAL
      PURPOSE COMPANIES BY PRC RESIDENTS MAY SUBJECT OUR PRC RESIDENT STOCKHOLDERS
      TO
      PERSONAL LIABILITY, LIMIT OUR ABILITY TO ACQUIRE PRC COMPANIES OR TO INJECT
      CAPITAL INTO OUR PRC SUBSIDIARIES, LIMIT OUR PRC SUBSIDIARIES’ ABILITY TO
      DISTRIBUTE PROFITS TO US OR OTHERWISE MATERIALLY ADVERSELY AFFECT US.




In
      October 2005, the PRC State Administration of Foreign Exchange, or SAFE, issued
      the Notice on Relevant Issues in the Foreign Exchange Control over Financing
      and
      Return Investment Through Special Purpose Companies by Residents Inside China,
      generally referred to as Circular 75, which required PRC residents to register
      with the competent local SAFE branch before establishing or acquiring control
      over an offshore special purpose company, or SPV, for the purpose of engaging
      in
      an equity financing outside of China on the strength of domestic PRC assets
      originally held by those residents. Internal implementing guidelines issued
      by
      SAFE, which became public in June 2007 (known as Notice 106), expanded the
      reach
      of Circular 75 by (1) purporting to cover the establishment or acquisition
      of
      control by PRC residents of offshore entities which merely acquire "control"
      over domestic companies or assets, even in the absence of legal ownership;
      (2)
      adding requirements relating to the source of the PRC resident's funds used
      to
      establish or acquire the offshore entity; (i) covering the use of existing
      offshore entities for offshore financings; (3) purporting to cover situations
      in
      which an offshore SPV establishes a new subsidiary in China or acquires an
      unrelated company or unrelated assets in China; and (4) making the domestic
      affiliate of the SPV responsible for the accuracy of certain documents which
      must be filed in connection with any such registration, notably, the business
      plan which describes the overseas financing and the use of proceeds. Amendments
      to registrations made under Circular 75 are required in connection with any
      increase or decrease of capital, transfer of shares, mergers and acquisitions,
      equity investment or creation of any security interest in any assets located
      in
      China to guarantee offshore obligations, and Notice 106 makes the offshore
      SPV
      jointly responsible for these filings. In the case of an SPV which was
      established, and which acquired a related domestic company or assets, before
      the
      implementation date of Circular 75, a retroactive SAFE registration was required
      to have been completed before March 31, 2006; this date was subsequently
      extended indefinitely by Notice 106, which also required that the registrant
      establish that all foreign exchange transactions undertaken by the SPV and
      its
      affiliates were in compliance with applicable laws and regulations. Failure
      to
      comply with the requirements of Circular 75, as applied by SAFE in accordance
      with Notice 106, may result in fines and other penalties under PRC laws for
      evasion of applicable foreign exchange restrictions. Any such failure could
      also
      result in the SPV's affiliates being impeded or prevented from distributing
      their profits and the proceeds from any reduction in capital, share transfer
      or
      liquidation to the SPV, or from engaging in other transfers of funds into or
      out
      of China.





25





We
      believe our stockholders who are PRC residents as defined in Circular 75 have
      registered with the relevant branch of SAFE, as currently required, in
      connection with their equity interests in us and our acquisitions of equity
      interests in our PRC subsidiaries. However, we cannot provide any assurances
      that their existing registrations have fully complied with, and they have made
      all necessary amendments to their registration to fully comply with, all
      applicable registrations or approvals required by Circular 75. Moreover, because
      of uncertainty over how Circular 75 will be interpreted and implemented, and
      how
      or whether SAFE will apply it to us, we cannot predict how it will affect our
      business operations or future strategies. For example, our present and
      prospective PRC subsidiaries' ability to conduct foreign exchange activities,
      such as the remittance of dividends and foreign currency-denominated borrowings,
      may be subject to compliance with Circular 75 by our PRC resident beneficial
      holders. In addition, such PRC residents may not always be able to complete
      the
      necessary registration procedures required by Circular 75. We also have little
      control over either our present or prospective direct or indirect stockholders
      or the outcome of such registration procedures. A failure by our PRC resident
      beneficial holders or future PRC resident stockholders to comply with Circular
      75, if SAFE requires it, could subject these PRC resident beneficial holders
      to
      fines or legal sanctions, restrict our overseas or cross-border investment
      activities, limit our subsidiaries' ability to make distributions or pay
      dividends or affect our ownership structure, which could adversely affect our
      business and prospects.





The
      value
      of our common stock will be affected by the foreign exchange rate between U.S.
      dollars and RMB, and between those currencies and other currencies in which
      our
      sales may be denominated. For example, if we need to convert U.S. dollars into
      RMB for our operational needs and the RMB appreciates against the U.S. dollar
      at
      that time, our financial position, our business, and the price of our common
      stock may be harmed. Conversely, if we decide to convert our RMB into U.S.
      dollars for the purpose of declaring dividends on our common stock or for other
      business purposes and the U.S. dollar appreciates against the RMB, the U.S.
      dollar equivalent of our earnings from our subsidiaries in China would be
      reduced.




IF
      THE
      CHINA SECURITIES REGULATORY COMMISSION, OR CSRC, OR ANOTHER PRC REGULATORY
      AGENCY, DETERMINES THAT CSRC APPROVAL IS REQUIRED IN CONNECTION WITH OUR PUBLIC
      OFFERING, OUR PUBLIC OFFERING MAY BE DELAYED OR CANCELLED, OR WE MAY BECOME
      SUBJECT TO PENALTIES.




On
      August
      8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the
      Regulation on Mergers and Acquisitions of Domestic Companies by Foreign
      Investors, which became effective on September 8, 2006. This new regulation,
      among other things, has certain provisions that require SPVs formed for the
      purpose of acquiring PRC domestic companies and controlled by PRC individuals,
      to obtain the approval of the CSRC prior to publicly listing their securities
      on
      an overseas stock market. However, the new regulation does not expressly provide
      that approval from the CSRC is required for the offshore listing of a SPV which
      acquires, directly or indirectly, equity interest or shares of domestic PRC
      entities held by domestic companies or individuals by cash payment, nor does
      it
      expressly provide that approval from CSRC is not required for the offshore
      listing of a SPV which has fully completed its acquisition of equity interest
      of
      domestic PRC equity prior to September 8, 2006. On September 21, 2006, the
      CSRC
      published on its official website a notice specifying the documents and
      materials that are required to be submitted for obtaining CSRC approval. It
      is
      not clear whether the provisions in the new regulation regarding the offshore
      listing and trading of the securities of a SPV applies to an offshore company
      such as us which has acquired the equity interest of PRC domestic entities
      in
      cash and has completed the acquisition of the equity interest of PRC domestic
      entities prior to the effective date of the new regulation. Since the new
      regulation has only recently been adopted, there remains some uncertainty as
      to
      how this regulation will be interpreted or implemented. Although the CSRC or
      another PRC regulatory agency has not determined that CSRC approval is required
      for our public offering, if the CSRC or another PRC regulatory agency
      subsequently determines that the CSRC's approval is required, we may face
      sanctions by the CSRC or another PRC regulatory agency. If this happens, these
      regulatory agencies may impose fines and penalties on our operations in the
      PRC,
      limit our operating privileges in the PRC, delay or restrict the repatriation
      of
      the proceeds from our public offering into the PRC, restrict or prohibit payment
      or remittance of dividends to us or take other actions that could have a
      material adverse effect on our business, financial condition, results of
      operations, reputation and prospects, as well as the trading price of our
      shares. The CSRC or other PRC regulatory agencies may also take actions
      requiring us, or making it advisable for us, to delay or cancel our public
      offering before settlement and delivery of the shares being offered by
      us.





26





NEW
      CORPORATE INCOME TAX LAW COULD ADVERSELY AFFECT OUR BUSINESS AND OUR NET
      INCOME.




On
      March
      16, 2007, National People's Congress passed a new corporate income tax law,
      which will be effective on January 1, 2008. This new corporate income tax
      unifies the corporate income tax rate, cost deductions and tax incentive
      policies for both domestic and foreign-invested enterprises in China. According
      to the new corporate income tax law, the applicable corporate income tax rate
      of
      our Chinese subsidiaries will incrementally increase to 25% over a five-year
      period. We are expecting that the rules for implementation would be enacted
      by
      the Chinese government in the coming months. After the rules are enacted, we
      can
      better assess what the impact of the new unified tax law would be over this
      period. The discontinuation of any special or preferential tax treatment or
      other incentives could adversely affect our business and our net
      income.





WE
      MAY BE
      EXPOSED TO LIABILITIES UNDER THE FOREIGN CORRUPT PRACTICES ACT, AND ANY
      DETERMINATION THAT WE VIOLATED THE FOREIGN CORRUPT PRACTICES ACT COULD HAVE
      A
      MATERIAL ADVERSE EFFECT ON OUR BUSINESS.




We
      are
      subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that
      prohibit improper payments or offers of payments to foreign governments and
      their officials and political parties by U.S. persons and issuers as defined
      by
      the statute, for the purpose of obtaining or retaining business. We have
      operations, agreements with third parties and we make sales in China. Our
      activities in China create the risk of unauthorized payments or offers of
      payments by the employees, consultants, sales agents or distributors of our
      Company, even though they may not always be subject to our control. It is our
      policy to implement safeguards to discourage these practices by our employees.
      However, our existing safeguards and any future improvements may prove to be
      less than effective, and the employees, consultants, sales agents or
      distributors of our Company may engage in conduct for which we might be held
      responsible. Violations of the FCPA may result in severe criminal or civil
      sanctions, and we may be subject to other liabilities, which could negatively
      affect our business, operating results and financial condition. In addition,
      the
      U.S. government may seek to hold our Company liable for successor liability
      FCPA
      violations committed by companies in which we invest or that we
      acquire.





RISKS
      RELATED TO CORPORATE AND STOCK MATTERS





OUR
      STOCK
      IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S PENNY
      STOCK REGULATIONS WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR
      STOCK.





Our
      stock
      is a penny stock. The SEC has adopted Rule 15g-9 which generally defines "penny
      stock" to be any equity security that has a market price (as defined) less
      than
      $5.00 per share or an exercise price of less than $5.00 per share, subject
      to
      certain exceptions. Our securities are covered by the penny stock rules, which
      impose additional sales practice requirements on broker-dealers who sell to
      persons other than established customers and "accredited investors". The term
      "accredited investor" refers generally to institutions with assets in excess
      of
      $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
      income exceeding $200,000 or $300,000 jointly with their spouse. The penny
      stock
      rules require a broker-dealer, prior to a transaction in a penny stock not
      otherwise exempt from the rules, to deliver a standardized risk disclosure
      document in a form prepared by the SEC which provides information about penny
      stocks and the nature and level of risks in the penny stock market. The
      broker-dealer also must provide the customer with current bid and offer
      quotations for the penny stock, the compensation of the broker-dealer and its
      salesperson in the transaction and monthly account statements showing the market
      value of each penny stock held in the customer's account. The bid and offer
      quotations, and the broker-dealer and salesperson compensation information,
      must
      be given to the customer orally or in writing prior to effecting the transaction
      and must be given to the customer in writing before or with the customer's
      confirmation. In addition, the penny stock rules require that prior to a
      transaction in a penny stock not otherwise exempt from these rules, the
      broker-dealer must make a special written determination that the penny stock
      is
      a suitable investment for the purchaser and receive the purchaser's written
      agreement to the transaction. These disclosure requirements may have the effect
      of reducing the level of trading activity in the secondary market for the stock
      that is subject to these penny stock rules. Consequently, these penny stock
      rules may affect the ability of broker-dealers to trade our securities. We
      believe that the penny stock rules discourage investor interest in and limit
      the
      marketability of our common stock.





27





In
      addition, we intend to apply for our common stock to be quoted on NASDAQ’s the
      Over-the-Counter Bulletin Board (OTCBB). There can be no assurance that we
      will
      be able to successfully apply for listing on the OTCBB or eventually on the
      American Stock Exchange, the NASDAQ Global Select Market, or the NASDAQ Capital
      Market due to the trading price of our common stock, our working capital and
      revenue history. Failure to list our shares on the OTCBB, the American Stock
      Exchange, or one of the NASDAQ Markets will impair the liquidity of our common
      stock.




NASD
      SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO BUY AND
      SELL OUR STOCK.





Section
      15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2
      promulgated thereunder by the SEC require broker-dealers dealing in penny stocks
      to provide potential investors with a document disclosing the risks of penny
      stocks and to obtain a manually signed and dated written receipt of the document
      before effecting any transaction in a penny stock for the investor's
      account.





Potential
      investors in our common stock are urged to obtain and read such disclosure
      carefully before purchasing any shares that are deemed to be "penny stock."
      Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the
      account of any investor for transactions in such stocks before selling any
      penny
      stock to that investor. This procedure requires the broker-dealer to (i) obtain
      from the investor information concerning his or her financial situation,
      investment experience and investment objectives; (ii)reasonably determine,
      based
      on that information, that transactions in penny stocks are suitable for the
      investor and that the investor has sufficient knowledge and experience as to
      be
      reasonably capable of evaluating the risks of penny stock transactions; (iii)
      provide the investor with a written statement setting forth the basis on which
      the broker-dealer made the determination in (ii) above; and (iv) receive a
      signed and dated copy of such statement from the investor, confirming that
      it
      accurately reflects the investor's financial situation, investment experience
      and investment objectives. Compliance with these requirements may make it more
      difficult for holders of our common stock to resell their shares to third
      parties or to otherwise dispose of them in the market or otherwise.





SHARES
      ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON
      STOCK, AS THE FUTURE SALE OF A SUBSTANTIAL AMOUNT OF OUR RESTRICTED STOCK IN
      THE
      PUBLIC MARKETPLACE COULD REDUCE THE PRICE OF OUR COMMON STOCK.





From
      time
      to time, certain of our stockholders may be eligible to sell all or some of
      their shares of common stock by means of ordinary brokerage transactions in
      the
      open market pursuant to Rule 144, promulgated under the Securities Act ("Rule
      144"), subject to certain limitations. In general, pursuant to Rule 144, a
      stockholder (or stockholders whose shares are aggregated) who has satisfied
      a
      one-year holding period may, under certain circumstances, sell within any
      three-month period a number of securities which does not exceed the greater
      of
      1% of the then outstanding shares of common stock or the average weekly trading
      -volume of the class during the four calendar weeks prior to such sale. Rule
      144
      also permits, under certain circumstances, the sale of securities, without
      any
      limitations, by a non-affiliate of our company that has satisfied a two-year
      holding period. Any substantial sale of common stock pursuant to Rule 144 or
      pursuant to any resale prospectus may have an adverse effect on the market
      price
      of our securities.




WE
      HAVE A
      HIGH CONCENTRATION OF STOCK OWNERSHIP AND CONTROL, AND A SMALL NUMBER OF
      SHAREHOLDERS HAVE THE ABILITY TO EXERT SIGNIFICANT CONTROL IN MATTERS REQUIRING
      SHAREHOLDER VOTES AND MAY HAVE INTERESTS THAT CONFLICT WITH YOURS.





Our
      common stock ownership is highly concentrated. See “Principal Shareholders.” As
      a result, a relatively small number of shareholders, acting together, have
      the
      ability to control all matters requiring shareholder approval, including the
      election of directors and approval of mergers and other significant corporate
      transactions. This concentration of ownership may have the effect of delaying,
      preventing or deterring a change in control of our company. It could also
      deprive our shareholders of an opportunity to receive a premium for their shares
      as part of a sale of our company and it may affect the market price of our
      common stock. In deciding how to vote on such matters, those shareholders’
interests may conflict with yours.





28





**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.**





None.





**Item
      3.    Defaults Upon Senior Securities.**




None.




**Item
      4.   Submission of Matters to a Vote of Security
      Holders.**




None.




**Item
      5.   Other Information.**




None.




**Item
      6.   Exhibits.**




**Exhibit No.**
            
            **Title
                of Document**31.1
            
            Certificationof
                Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
                promulgated under the Securities and Exchange Act of 1934, as
                amended31.2
            
            Certificationof
                Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d
                14(a),
                promulgated under the Securities and Exchange Act of 1934, as
                amended32.1
            
            Certification
                pursuant to Section 906 of Sarbanes Oxley Act of 2002(Chief
                Executive Officer)32.2
            
            Certification
                pursuant to Section 906 of Sarbanes Oxley Act of 2002(Chief
                Financial Officer)





29





**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, there unto duly
      authorized.




**Universal
                Solar Technology, Inc.******Date: November
                5 , 2008
            By:
            /s/
                Wensheng ChenWensheng
                ChenChief
                Executive Officer




November
                5, 2008
            By:
            /s/
                Ling ChenLing
                Chen
              Chief
                Financial Officer
              (Principal
                Financial and Accounting Officer)





30